Rising data center electricity demand is increasing PJM capacity costs and prompting new proposals for managing large energy users.
Monitoring Analytics, PJM Interconnection’s independent market monitor, estimates that data center demand accounted for an estimated $6.3 billion, or 38%, of the costs from PJM’s latest capacity auction. Across the grid operator’s last four auctions, data center-related charges totaled about $29.4 billion, increasing capacity, energy, and transmission costs for customers throughout the region.
Several proposals under consideration that would require data centers and other large electricity users to secure dedicated generation or participate in separate capacity auctions with long-term contracts. PJM is also developing a backstop auction to address its current capacity shortfall, while uncertainty over how many proposed data centers will ultimately be built continues to complicate demand forecasts and cost allocation.
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